California milk mess shows folly of over-regulation

A battle over milk prices in California has turned ugly, pitting dairy farmers against cheese makers, with consumers caught in the middle.

Boston Globe | Nov 26, 2012

In Monty Python’s parody “Life of Brian,” bad acoustics and petty bickering make it difficult for a group of bystanders to catch all the details of a Sermon on the Mount. “I think it was. . . ‘blessed are the cheese makers,’ ” comes the translation.

Those aren’t words that inspire the faithful, but they do appear to have inspired agricultural regulators in California. During the past weeks, a battle over milk prices in the Golden State turned ugly, pitting dairy farmers against cheese makers, with consumers caught in the middle. Accusations of “bullying” and “shaving the truth” filled the air; but more pointedly, the confrontation exposed the utter insanity of a price-fixing system that would make Soviet central planners blush.

In California, cheese makers pay nearly $2 less for 100 pounds of milk than the rest of the country. As a result, The Wall Street Journal[3] reports, nearly 100 dairy farms are shutting their doors this year. Who said regulation doesn’t destroy jobs? Ironically, the cheese industry argues that they need the pricing deal because all the other regulations in California are killing them.